Southern Cross Austereo chair hits out at rival ARN Media’s failed takeover bid
A planned takeover of Southern Cross Austereo has failed after nine months of negotiations, but future deals could be on the table.
Southern Cross Media chair Heith Mackay-Cruise has issued a scathing assessment of the failed takeover bid by rival media company ARN Media, labelling it “frustrating”, but he has not ruled out considering future offers.
SCA has been in talks with ARN Media and Anchorage Capital Partners since October, but on Saturday was told that the consortium’s proposal to acquire the company had collapsed.
On Monday, in a statement to the ASX, SCA said it was “disappointed” with the result.
“It is frustrating that the consortium has now withdrawn its proposal in circumstances where any potential material concerns should have been identified much earlier in the process,” he said.
“We remain open to considering proposals that would deliver fair value and be in the best interests of all SCA shareholders.”
Mr Mackay-Cruise said shareholders do not need to take any action, and they will continue to be updated under disclosure regulations.
The original bid for SCA by ARN Media and Anchorage was announced on October 18, but after months of negotiations Anchorage withdrew interest over its concerns about SCA’s declining TV assets.
SCA is run by chief executive John Kelly, while ARN Media is headed by Ciaran Davis.
In a statement by ARN to the ASX on Monday, it said: “Following a period of due diligence engagement with SCA, ACP has notified ARN of its withdrawal from the consortium.
“As part of its due diligence, ACP and its advisers completed an extensive review of regional TV.
“In light of a continued decline in the trading performance of regional TV since the existing long-term contractual obligation of SCA for outsourced TV transmission, it does not support ACP’s regional TV investment thesis.”
Under the proposal, ARN would acquire certain SCA-owned radio stations and Anchorage Capital would acquire the remaining radio stations and certain ARN radio stations.
Anchorage would have also acquired the SCA TV network across Queensland, NSW, Victoria, SA, WA and Tasmania.
ARN Media chairman Hamish McLennan did not rule out engaging with SCA on a revised non-binding indicative proposal.
“I firmly believe ARN is the most well-run audio business in Australia, and we are in a position of strength to progress the ARN indicative proposal for the benefit of both ARN and SCA shareholders,” Mr McLennan said.
“It would deliver a business of the scale necessary to compete against global platforms.”
SCA broadcasts 93 free-to-air TV signals across Australia, using Ten’s programming and advertising in areas throughout the country.
The company also has 99 radio stations including the Hit Network and Triple M stations and ARN Media owns 58 radio stations including KIIS FM – home to one of the most popular radio programs in Australia, The Kyle And Jackie O Show, which recently expanded to Melbourne – and Gold.
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